GSMA Annual Report Summary

A few weeks ago we headed to Barcelona for the world’s largest mobile industry event, GSMA’s Mobile World Congress, and now we take a look at their corresponding annual Mobile Economy Report.

The GSMA Mobile Economy Report highlights the latest insights into the state of the mobile industry worldwide. Produced by GSMA Intelligence, their in-house research team, the report contains technology, socio-economic and financial data, gathered from every operator group, network and MVNO worldwide.

It stated that at the end of 2016, 65% of the world’s population had a mobile subscription, totalling 4.8 billion unique mobile subscribers. This represents a growth rate of 5.6% over the past 4 years but it is predicted that this rate will slow to just 4.2%, meaning that by 2020 global penetration rate will reach 73%. While mobile subscriber growth appears to be slowing though, adoption by nearly three quarters of the world’s population does equate to approximately 5.7 billion people utilising mobile services – so it’s more about maturity than market slowdown, as GDP figures below indicate.

Key figures included in the report are:

+ Unique mobile subscribers will grow at a CAGR of 4.2% between 2016 and 2020

+ LTE now reaches 60% of the population as operators continue to invest in network rollouts

Fig.1, taken from GSMA, shows unique subscribers by global region:

A Generational Shift

In 2016, 3G and 4G technologies accounted for 55% of total mobile broadband connections. According to the GSMA report though, the proportion of 4G connections alone is set to almost double from 23% to 41% by the end of the decade. With the much-anticipated arrival of 5G expected to be commercially rolled out in 2020 (3GPP), it is said that adoption rates will reach approximately 1.1 billion connections by 2025 with 5G networks covering around a third of the global population.

The question though, is which country will be the first to win the 5G race? Phillip Hammond, UK Chancellor, announced plans in his Autumn Statement (November) to dedicate £740 million to the development of 5G. Meanwhile, Korea Telecom (KT) announced at last year’s 5G World event, their plans to run a 5G trial service at the 2018 Pyeong Chang Winter Olympic Games. With 4G LTE already set for improved coverage, and plans for 5G well underway, cellular connectivity will only continue to better enable businesses.

A Growing Economy

In 2016, 4.4% of GDP globally was generated by mobile technologies and services – amounting to approximately $3.3 trillion economic value. The GSMA estimate that by 2020 this figure will increase to more than $4.2 trillion, 4.9% GDP. Furthermore, the mobile ecosystem supported approximately 28 million jobs in 2016 and made a substantial contribution to the funding of the public sector, with approximately $450 billion raised in 2016 in the form of general taxation. And this is only set to increase over the coming years.

A Geographical Shift

It is also clear that a geographical shift is underway. The report discusses how the UN Sustainable Development Goals (SDGs) have outlined a broad agenda in order to integrate economic, social and environmental issues across both developed and developing economies. This strategy is already underway as the report highlights that by the end of 2016, two thirds of the world’s population had a mobile subscription. Ten countries will account for 72% of growth in new mobile subscribers worldwide with Asia Pacific set to account for two thirds of new subscribers by the end of the decade. India is already the world’s second largest mobile market (China is first) with the other eight countries being Nigeria, Brazil, US, Indonesia, Mexico, Pakistan, Myanmar and Bangladesh.

A Conclusion

It is clear that mobile connectivity will continue to be a mainstream technology across the world for consumers and businesses alike, in both developing and developed countries.

For businesses today, cellular connectivity has now gone far beyond connecting handsets and basic M2M applications; whether it’s in-vehicle networking solutions, delivering rapid-site connectivity or connecting the Internet of Things, cellular connectivity is enabling organisations to implement new business models and drive transformation. Taking advantage of improved and expanded coverage, organisations are investing in cellular technologies to expand their networking capabilities today, but also to prepare for their needs of tomorrow – and with 5G just around the corner, this giant step in wireless technology can only mean that cellular connectivity will continue to better enable businesses.